LONDON (Reuters) - Gold prices were near their highest in four months on Thursday as a dip in global stocks and recent gains in commodity prices encouraged investors to hold bullion as insurance against a stock market correction and rising inflation.

Spot gold was up 0.2 percent at $1,319.77 an ounce at 1301 GMT after touching $1,326.56 on Wednesday, the highest since Sept. 15.

U.S. gold futures were 0.1 percent higher at $1,320 an ounce.

Gold has rallied by more than $80 since a low in mid-December, helped by a weakening of the dollar that has made bullion cheaper for holders of other currencies.

It was boosted on Wednesday after a Bloomberg News report that China would slow or stop U.S. bond purchases pushed the dollar sharply lower against the yen and raised speculation that China could buy gold.

The dollar however recouped some losses on Thursday after China's regulator dismissed the Bloomberg report.